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Netflix's New Chapter

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Re: Netflix's New Chapter

#261

Post by justincormack »

runako wrote: post #210
ApolloFortyNine wrote: post #77

Earlier quoted context omitted.

HBO max doesn't even have every HBO show, they dropped west world from the platform.

This decision would be enough to cancel my HBO subscription, but apparently it's bundled into our cable package so I don't directly pay for it anyway. HBO has broken the core contract of branded services (i.e. you get access to everything they make), making the value of a subscription much more difficult to understand. I can go back and watch 7 seasons of Arli$$ from 1996, but not the West World episodes released las…

A lot of shows were pre-contracted elsewhere, so companies that moved into streaming have to wait for the rights to revert.

Re: Netflix's New Chapter

#262

Post by subsaharancoder »

scarface74 wrote: post #58
darth_avocado wrote: post #21

Earlier quoted context omitted.

> It’s Disney’s content That is partly the problem. You spend hundreds of millions to make blockbuster movies and then release it on Disney+ in a few months for free (or sometimes directly). That costs money. Add to that over reliance on only Disney content creates two problems: 1. You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round. 2. You have to pay money to…

That’s not entirely true. Disney+ is partially losing money because of “transfer payments”. Disney+ has to “pay” Disney studios the market rate for the right to stream a movie. Of course the money mostly flows up to Disney. But from an accounting standpoint, Disney+ can’t say it’s profitable by getting movies for free from Disney studios and cause Disney studios to lose potential profits they could have made elsewher…

> That’s not strictly true either for kids content. You can keep recycling content to kids for years and kids will rewatch the same thing.

I'm looking at you Netflix and your lack of new seasons of Octonauts and Cat in the Hat :-)

Re: Netflix's New Chapter

#263

Post by tedsanders »

jdprgm wrote: post #126

A few thoughts: 1) On the talk of saturation Netflix had somewhere around 230 mil subscribers last year. In theory the addressable market should be adults ~20 and up so somewhere around 5 bil. So not even close to saturation. Discounting say half of that imagine how much better the service could be with 10x the current subscriber base. They talk about increasing subscription price... At 10x you could half the subscri…

Counterpoints:

- Average person lives in a household of 4.9 people[1], which means market size isn't 5 bil but closer to 1 bil

- Plus, the household needs broadband internet, which rules out vast swaths of the world today, brining down addressable market further

- Many of the hundreds of millions of households not signed up are in markets like India, where the price is like 20% of the price in the USA or Europe; so a 100% increase in membership might only mean a 33% increase in revenue

- Further, if you capture the Indian and Nigerian and Indonesian markets, sure you have more revenue (say +33%) to spend on more content, but a lot of that content will need to be Indian content and Nigerian content and Indonesian content, so the actual increase in content spend relevant to you will much much less than 33%

In conclusion, I think a +500% increase in spend on content you're interested in is not a plausible outcome of everyone on Earth signing up for Netflix. It's probably an order of magnitude less, like +50%.

[1]: https://www.pewresearch.org/fact-tank/2020/03/31/with-billio...

Re: Netflix's New Chapter

#264

Post by WorldMaker »

JakeTheAndroid wrote: post #102
thiago_fm wrote: post #16

Something I don't understand is why Disney and others need to have their own streaming service. Why Netflix can't sit down with Disney and merge the two streaming services. Disney is amazing at making content, so is Netflix at the moment. They could take a look at the present, their market cap, debt and so on and structure a solution that would: 1. Make Netflix the best streaming service with the best content, also b…

Well this is already sort of the case. But instead of Netflix it's Hulu. Hulu was the sort of agnostic platform that included live TV and needed to be able to VOD all the shows available on live TV networks. Now, you bundle Hulu + ESPN + Disney. Until every company wanted their own streaming service, Hulu was where you could find broad network content. And they even have commercials, so it worked great by classical T…

> And Hulu doesn't aggregate ESPN+ and Disney+ in a single pane.

My Hulu shows aggregated ESPN+ in the "Live TV" category (which does show up on the Home Hub as well). It's quite obvious to me because that and HBO (incidentally) are the only "Live TV" I pay for so all I see in the Live TV section at all are ESPN+ and HBO.

Disney+ aggregation isn't there in Hulu, but the opposite is definitely already happening: a bunch of Hulu shows are now aggregated in Disney+ for me. Though the border between "aggregated there" and "slowly moving there" is quite blurry as Disney does seem keen to move towards Disney+ as the final brand left standing and eventually killing the Hulu brand. This is already the case in most of the world (Star+ which was the Indian sub-continent Hulu equivalent that Disney also outright bought is a "hub" in Disney+ rather than the other way around, despite predating Disney+ by several years just like Hulu; incidentally Disney did integrate a Star+ hub into Hulu in the US if you were curious what some of that content looks like), so it does seem inevitable in the US eventually Hulu will be eaten by Disney+.

(The one weird twist to that being how protective Disney as a brand has been of their family friendly part of their brand image in the US and in their merger of Fox and Hulu they found it useful to treat the Hulu brand as "Disney After Dark" and avoid some of the "family friendly" issues in the first few months of Disney+ while they added parental controls and other family focused tools after the US launch date. Disney will get to unwind the concept that they need a "Disney After Dark" that their own PR created in the first place in order to eventually merge Hulu into that plus in Disney+.)

Re: Netflix's New Chapter

#265

Post by lvl102 »

no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

Netflix is valued as tech but it’s no longer tech. Once you recalibrate that you can easily see where the company is headed. It’s not going to be pretty. They relied on the Koreans (among others) for cheap shows but that’s not going to last long.

Re: Netflix's New Chapter

#266

Post by XorNot »

nordsieck wrote: post #156
msluyter wrote: post #117

Earlier quoted context omitted.

"1. You can’t have enough new content every month, subscribers therefore don’t keep the subscription year round." For our household, this is true of all streaming services. We rotate them, or subscribe for short stretches. For example, I got Paramount+ for a couple of months, watched all of the Star Trek content, and then cancelled. Amazon Prime is the exception (because free(-ish) shipping.) I wonder to what extent…

> I wonder to what extent the big streaming services are aware of this phenomenon and how they hope to mitigate it. I suspect that not many people do this. It it becomes a problem, they can always bring back the old weekly episode model.

Since I became a parent, waiting for weekly episodes to completely release and then subscribing has become immensely favorable since it turns out I can easily live without being a part of the internet discussion of whatever.

Re: Netflix's New Chapter

#267

Post by zippergz »

lotsofpulp wrote: post #50
jedberg wrote: post #30

Earlier quoted context omitted.

> This also fails to account for the strength of HBO Max (very strong sub numbers) It's important to note that those numbers are very juiced. For example, my HBOMax comes for free with my AT&T internet (still). I've never paid them a dime directly. When they first started they were basically giving away accounts like crazy to get growth. I think they also gave free accounts to their cable subscribers. So while their…

ATT’s grandfathered mobile plans including HBO Max are a ripoff ever since they sold it to Discovery. You effectively are paying ~$15+$5 per line per month for 1 account of HBO Max compared to the current ATT plans offered to customer. I have 6 lines on my ATT Unlimited Premium Plan (the most expensive retail plan), and the monthly cost dropped by $60 by removing HBO max and switching to the new plans. It is probably…

This may be the case with the mobile plans, but I get HBO Max with my AT&T fiber service, and short of going to a lower speed tier, I do not see any cheaper plan I can switch to without HBO Max.

Re: Netflix's New Chapter

#268

Post by flyingpenguin »

scarface74 wrote: post #56
no_wizard wrote: post #7

I'm gonna attempt to break this down: - Netflix has 5-6 Billion USD free cash flow, and because they got what debt they do have under favorable terms, they are positioned to retain most of that free cash flow - Disney, Comcast (Peacock), CBS/Viacom and other media corporations are saddled with debt, and are all losing money on their own independent streaming businesses. Likely untenable in their shareholder model - T…

The bear case for Netflix is once again the “DropBox problem”. Streaming services is becoming a feature not a product. When Disney creates a movie. It can monetize the movie across its entire “flywheel” - movie theatres, video on demand, licensing to third parties, toys, theme parks etc. It’s streaming content has already made a billion in the box office before it ever hits streaming. Streaming is additive. Netflix p…

I think Google quit.

Re: Netflix's New Chapter

#269

Post by majormajor »

rcme wrote: post #157
madeofpalk wrote: post #54

Earlier quoted context omitted.

On top of the... 'opportunity cost' of not licensing out content that otherwise would have went to Netflix, ABC, whoever. If previously Disney made Daredevil and 'sold' it to Netflix for $1m (hypothetically), but now you're holding that back to stream yourself, you've got to account for that missing $1m somehow.

No you don't. You don't normally include opportunity cost on your balance sheet.

These deals can be complex. Consider if you were going to make a movie, and were shopping it around to studios.

If Studio A was like "we'll give you a 10% cut of whatever we then license it for for streaming" and Disney was like "we're gonna stream it on our own platform for free, sorry" that's a negotiation problem for Disney. So selling internally at market rate is a good thing for relationships with external creators and partners.

Re: Netflix's New Chapter

#270

Post by scarface74 »

flyingpenguin wrote: post #268
scarface74 wrote: post #56

Earlier quoted context omitted.

The bear case for Netflix is once again the “DropBox problem”. Streaming services is becoming a feature not a product. When Disney creates a movie. It can monetize the movie across its entire “flywheel” - movie theatres, video on demand, licensing to third parties, toys, theme parks etc. It’s streaming content has already made a billion in the box office before it ever hits streaming. Streaming is additive. Netflix p…

I think Google quit.

Google has YouTube live and just outbid everyone to get the (American) football deal that DirecTV use to have.

Google is playing a slightly different game.

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